‘Real-time’ Equity Risk Premium

This paper explores methods of estimating the equity risk premium (ERP) in discount rates and introduces the merits and benefits of a forward looking approach to measurement. Grant Thornton’s defined process for estimating a time specific or “real time” ex-ante equity risk premium is presented as a unique and novel process that may be either a compliment or alternative to historical forms of ERP measurement. This is contributed by Grant Thornton advisory and valuation professionals Bryan Benoit and Taylor West.